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Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
2
Tokio Marine Kiln Life Syndicate 0308
Report and Accounts
For the year ended 31 December 2024
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
3
Contents
Directors and advisers
4
Report of the Directors of the managing agent
5
Syndicate 308 annual accounts for the year ended 31 December 2024
10
11
Profit and loss and other comprehensive income
Technical account
long-term business for the year ended 31 December 2024
14
Profit and loss and other comprehensive income
Non-technical account
long-term business for the year ended 31 December 2024
15
Balance sheet: assets
as at 31 December 2024
16
Balance sheet: liabilities
as at 31 December 2024
17
Statement of changes in member
s balances
for the year ended 31 December 2024
18
Statement of cash flows
for the year ended 31 December 2024
19
Notes to the annual accounts and significant accounting policies
20
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
4
Directors and advisers
Managing agent
Tokio Marine Kiln Life Syndicate 308 (Syndicate
308), Tokio Marine Kiln Syndicate 1880 (Syndicate 1880), Tokio Marine Combined Syndicate 510 (Syndicate 510) and
Tokio Marine Kiln Catastrophe Syndicate 557 (Syndicate 557). TMKS is a wholly-
owned subsidiary of Tokio Marine
Kiln Group Limited (TMKGL). TMKGL and its subsidiaries are referred to as
parent is Tokio Marine Holdings, Inc., Japan (Tokio Marine).
TMKS is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority
(FCA)
.
Directors
S Batori
C Fuhrmann
V M Gordon-Walker
N I Hutton-Penman
B T Irick
A McNamara
C J G Moulder
R Patel
A M W Shaw
V Syal
D A Torrance (Chair)
M H Trussell
C J B Williams (resigned 31 March 2024)
Company secretary
Independent auditors
A Gordon
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Run-off manager
7 More London Riverside
K Boyes
London SE1 2RT
Registered office
Investment managers
20 Fenchurch Street
New England Asset Management Limited
London EC3M 3BY
The Oval-Block 3, Shelbourne Road, Ballsbridge,
D04 T8F2, Dublin 4, Ireland
Registered numbers
TMKS company number
00729671
FCA reference number
204909
1041K
Bankers
Barclays Bank plc
Citibank, N.A.
BNY Mellon
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
5
Report of the Directors of the managing agent
The Directors of the managing agent (the Board) present their report and audited accounts for the year ended 31
December 2024 under UK Generally Accepted Accounting Practice (GAAP). This report covers Syndicate 308 (the
Syndicate) managed by TMKS. The managing agent
which is in Japan.
The annual report for the managed syndicate is prepared using the annual basis of accounting as required by Statutory
Instrument No. 1950 of 2008, the Insurance Accounts Directive
Syndicate and Aggregate Accounts) Regulations
2008.
Principal activities
Syndicate 308 was placed into run-off in 2017, and as such, its principal activity is administering the policies which remain
in-force.
Results
The result for the 2024 calendar year was a profit of £2.0 million (2023: £1.3 million). The S
performance indicators during the year were as follows:
2024
£m
2023
£m
Gross written premium
2.0
1.2
Net earned premium
1.9
0.9
Profit for the financial year
2.0
1.3
Investment income
0.6
0.6
Net assets
9.5
7.5
The profit of £2.0 million (2023: £1.3 million) is driven by a reduction in existing reserves following benign claims activity
in the year.
2018 year of account
The 2018 year of account will remain open at 31 December 2024 as there remain barriers to closure. Syndicate
underwriting year accounts have not been prepared for the run-off 2018 year of account in accordance with the exemption
available under Regulation 6(1) of the 2008 Regulations.
2025 Outlook
Syndicate 308 will continue to focus on an orderly run-off. The Syndicate will operate as an aligned syndicate with a single
corporate member participating solely on the 2018 year of account.
Capital management
Services and Markets Act 2000, and in accordance with Solvency II and the Insurance and Reinsurance Undertakings
(Prudential Requirements) (Risk Margin) Regulations 2023.
beyond that to meet its own financial strength, licence and ratings
objectives.
syndicate level as a
ber level only, not at a syndicate level.
the prospective underwriting year. This amount must be sufficient to cover a 1 in 200-year loss, reflecting uncertainty in
the ultimate run-
Syndicate must also calculate its SCR at the same
confidence level but reflecting uncertainty over a one-year time horizon (one-
Planning Group.
A syndicate may be supported by one or more underwriting members of
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
6
Each member
s total capital requirement
participates on more than one syndicate, a credit for diversification is provided to reflect the spread of risk, but consistent
with determining an SCR which reflects the capital requirement to cover a 1 in 200-year
e Economic Capital
Assessment (ECA). The purpose of this uplift, which is a requirement set by
, is to meet
Provision of capital by members
Each member may provide
Accordingly, all of the assets less liabilities of the S
-wide capital uplift applied for 2024 to derive the ECA is 35.0% (2023: 35.0
Capital allocation
The Syndicate has an approved internal model which is used to calculate capital requirements, allocate capital to risk
categories and assess the value of different business and reinsurance strategies. The calculations are based upon
sophisticated mathematical models that reflect the key risks in the business, allowing for the probability of occurrence,
the potential impact should losses occur and the interactions between the different risk types.
The results of the modelling confirm that the majority of capital is required to support insurance risk.
Risk management
There is a comprehensive, enterprise-wide Risk Management Framework (RMF) in place for the management of risk across
the whole of TMK.
TMK is exposed to a variety of risks and the Board has developed a strategy for categorising, managing and reporting
these different risks. This high-level categorisation is called the TMK Risk Universe. The Risk Universe is defined
complete view of all possible types of risk that the firm may face, re
includes risks that could positively or negatively impact the business.
Key risks facing TMK are included in a risk register and form part of the regular risk assessment process, facilitated by
the Risk Management team (RMT). Risks are reported on a quarterly basis as part of the Own Risk and Solvency
Assessment (ORSA) process to the Risk, Capital & Compliance Committee (RCCC).
Syndicate 308 is managed in accordance with the Run-Off Plan considering the duties of the managing agent and
-Off Committee and subsequently, the
Audit Committee.
The principal risks, known as Tier 1 risks, are: Solvency, Liquidity, and Reputational. The Syndicate also has exposure to
the following Tier 2 risks: Run-off, Insurance, Market, Counterparty Credit, Operational, Regulatory and Conduct.
Additionally, the Syndicate faces Emerging risks.
Tier 1 risks:
Solvency risk
This is the risk of non-
Syndicate has enough capital to meet demands as they
fall due.
Solvency risk is driven by exposure to several other risks such as Insurance, Market, Credit and Operational. These risks
and their mitigants are described later in this section.
Liquidity risk
This is the risk of the Syndicate being unable to meet liabilities in a timely manner due to the lack of liquid resources.
To mitigate liquidity risk, the Treasury team reviews Syndicate cash flow projections quarterly, and also stress tests them
against Realistic Disaster Scenarios. The Syndicate also has the ability to make cash calls on the member in order to
manage liquidity.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
7
Reputational risk
lead to adverse effects such as
brand damage, or litigation.
In the modern digital era, reputational risk and the subsequent threat to
strong brand is becoming more significant.
Loss of confidence from customers, regulators or capital providers could cause long-term harm to the business.
In light of this, all staff are made aware of their responsibilities to clients and other stakeholders.
Tier 2 risks:
Run-off risk
Run-off risk is the risk of failing to manage the run-off of the Syndicate efficiently and effectively, in the best interests of
the member and avoiding any detriment to policyholders. The various risks associated with the run-off include reputational
risk, regulatory risk and the impact it may have from a resourcing perspective in terms of the potential for distraction
from business-as-usual activities.
These risks require careful management and are a key priority for the business. It is clearly stated in the run-off plan that
the managing agent will manage the run-
the Lloyds Oversight Principles, and with full regard to its duties and obligations as a managing agent. A Run-Off
Committee is in place to oversee the management of the run-off and this reports into the Audit Committee.
Insurance risk
This is the risk of loss arising from the inherent uncertainties as to the occurrence, amount and timing of insurance
liabilities.
Insurance risk is sub-divided into several categories, most pertinent to Syndicate 308 are underwriting risk, reinsurance
risk and reserving risk:
Underwriting risk
This is the risk arising from fluctuations in the frequency and severity of financial losses from unexpired risks on existing
contracts.
Reinsurance risk
This is the risk that reinsurance purchased to protect the gross account does not respond as intended due to, inter alia,
mismatch with gross losses; poorly worded contracts; reinsurer counterparty risk; or exhaustion of reinsurance limits.
Reinsurance is used to protect capital against underwriting risk volatility.
Reserving risk
This is the risk that reserves held on the balance sheet will be inadequate to meet the net amount payable when insurance
liabilities crystallise and is exacerbated due to the inherent uncertainty of knowing the ultimate timing and quantum of
liabilities incurred.
Claims provisions represent estimates, based on both the run-
and administration costs of claims incurred. A variety of estimation techniques are used, generally based upon statistical
analyses of historical loss development patterns, to assist in the establishment of appropriate claims reserves.
In addition, the estimates are subject to independent review by external actuaries, who sign an annual Statement of
basis with a reasonable margin for prudence.
Market risk
This is the risk that arises from fluctuations in values of, or income from assets, interest rates or exchange rates. Assets
are held as a result of underwriting activities either in premium trust funds or as capital support. On-going investment
strategy, investment objectives and the management of risks arising from investments are agreed by the Investment
Committee in line with the Prudent Person Principle, as outlined in the Solvency II Directive.
The Syndicate monitors its cash-flow on a daily basis and reviews its cash-flow forecasts, foreign currency exposures and
asset-liability matching regularly.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
8
Counterparty credit risk
This is the risk of loss if another party fails to meet its financial obligations, including failure to meet them in a timely
manner.
The Syndicate is exposed to three types of credit risk: reinsurer credit risk; broker/coverholder credit risk; and investment
credit risk. Credit exposure and aggregate exposure to reinsurers are managed by the Outwards Reinsurance team. The
performance of premium debtors, from brokers and coverholders, is monitored regularly. The Investment Committee
portfolio and manages this within permitted counterparty limits.
Operational risk
This is the risk that errors caused by people, processes or systems lead to losses to the Syndicate.
The Board seeks to manage this risk by the recruitment of high calibre staff and providing them with ongoing, high-quality
training. Operational risks are reviewed on a regular basis with departmental heads responsible for identifying, assessing
and controlling operational risks effectively, as well as attesting to the effectiveness of these controls on a regular basis.
This forms the Risk and Control Self-Assessment (RCSA) process which is supported by the RMT who independently assess
key risks and controls on a regular basis.
There is a strong risk reporting and risk governance system in place to ensure effective risk management of operational
risk. The RCCC reviews the most material elements of the operational risk profile quarterly, in line with the RMF. Attention
is paid to how the risks from cyber security threats are managed by the Information Security Group.
The Board is aware of its fiduciary responsibilities to capital providers across each of its four managed syndicates and is
careful to ensure equity between them. Potential conflicts of interest between capital providers are managed through the
Conflicts Committee, which reports to the Board.
Regulatory risk
This is the risk of loss owing to a breach of regulatory requirements or failure to respond to regulatory change.
The Board is required to comply with the requirements of the Financial Conduct Authority (FCA), Prudential Regulation
Authority (PRA)
of US and Canadian regulated business. The Compliance function is responsible for monitoring compliance with regulation
and monitoring of regulatory change. The Compliance Framework outlines the broad regulatory and compliance structure
that applies to all staff.
regulate international
trade. Processes and controls are in place to screen and monitor transactions against relevant requirements to ensure
compliance with them.
Conduct risk
This is the risk of financial and/or service detriment which adversely affects
the customer value chain.
The Board
s conduct objective is to build, maintain and enjoy long-term relationships with customers, whether they be
held directly or indirectly via a third party. This culture of partnership is fundamental to the Syndicate
s dealings with its
customers, and comes regardless of the complexity of the risk, the sophistication of the buyer, or the length of the supply
chain to the end customer.
The conduct objective is central to delivering good outcomes for customers, aligning with the FCA Consumer Duty's cross-
cutting rules and four customer outcomes: products and services, price and value, consumer understanding, and
consumer support, which apply to all in scope UK business.
The management of conduct risk applies to all business, regardless of product lines and customer types, across both open
market and delegated underwriting and is achieved through the application of the Conduct Risk Framework. The
framework is applied in a proportionate, risk-based way which takes account of the different inherent conduct risk across
products, distribution and customer types. Conduct risk and the treatment of customers is monitored by the Product and
Underwriting Governance Committee (PUGC).
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
9
Other risks:
Emerging risk
The Board defines an emerging risk as relating to a new or evolving area that is perceived to be potentially significant in
terms of its impact on society and the insurance industry. These risks are characterised by significant uncertainty, with
limited relevant historical information.
The Board is committed to the continual research and identification of emerging risks and actively monitors research
undertaken independently, and via market working groups. Emerging risk analysis is included in the ORSA process with
annual and where relevant, quarterly updates. Through the effective management of emerging risks, the Board is able to
identify external trends and threats.
Directors
The Directors of the managing agent who served during the year ended 31 December 2024, as well as any subsequent
changes, are listed under the section
Directors and advisers
. The Directors did not participate on the Syndicate.
Post balance sheet events
These are discussed in note 24 of the annual accounts.
Disclosure of information to the auditors
As far as each person who was a Director of the managing agent at the date of approving this report is aware, there is
no relevant audit information, which is information needed by the auditors in connection with their report, of which the
auditors are unaware. Having made enquiries of fellow Directors of the managing agent and the S
auditors,
each Director has taken all the steps that they are obliged to take as a Director in order to make themselves aware of
any relevant audit information and to establish that the auditors are aware of that information.
Reappointment of auditors
The Board approved the reappointment of PricewaterhouseCoopers LLP as auditors for the current year and on an ongoing
basis for the managed syndicates, managing agent and other TMK group entities.
Syndicate annual general meeting
In accordance with the Syndicate Meetings (Amendment No. 1) Byelaw (No. 18 of 2000) the managing agent does not
propose holding a syndicate annual meeting this year; objections to this proposal or the intention to reappoint the auditors
for a further 12 months can be made by the Syndicate member in writing to the Company Secretary within 21 days of
this notice.
Approved by the Board of Directors
A M W Shaw
Chief Executive Officer
Tokio Marine Kiln Syndicates Limited
5 March 2025
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
10
Statement of managing
responsibilities
The managing agent is responsible for preparing the Syndicate annual report and annual accounts in accordance with
applicable law and regulations.
requires the managing agent to prepare syndicate annual accounts for each syndicate at 31 December each year, in
accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and
applicable law). The annual accounts are required by law to give a true and fair view of the state of affairs of the syndicate
as at that date and of its profit or loss for that year.
In preparing the S
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable United Kingdom accounting standards have been followed, subject to any material
departures disclosed and explained in the annual accounts; and
prepare the annual accounts on the going concern basis for each syndicate unless it is intended for the syndicate to
cease operations, or it has no realistic alternative but to do so.
The managing agent is responsible for keeping proper accounting records which disclose with reasonable accuracy at any
time the financial position of each syndicate and enable it to ensure that the syndicate annual accounts comply with the
2008 Regulations. It is also responsible for safeguarding the assets of each syndicate and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The managing agent is responsible for the maintenance and integrity of the corporate and financial information included
on its website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
The managing agent is responsible for the preparation and review of the iXBRL tagging that has been applied to the
uding designing, implementing and
maintaining systems, processes and internal controls to result in tagging that is free from material non-compliance with
The Directors of the managing agent confirm that they have complied with the above requirements in preparing the
Syndicate annual accounts.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
11
Independent auditors’ report to the member of Syndicate 308
Report on the audit of the syndicate annual accounts
Opinion
In our opinion, 308’s syndicate annual accounts:
●
give a true and fair view of the state of the syndicate’s affairs as at 31 December 2024 and of its profit and cash
flows for the year then ended;
●
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland”, and applicable law); and
●
have been prepared in accordance with the requirements of The Insurance Accounts Directive (Lloyd’s Syndicate
and Aggregate Accounts) Regulations 2008 and the requirements within the Lloyd’s Syndicate Accounts
Instructions version 2.0 as modified by the Frequently Asked Questions issued by Lloyd’s version 1.1 (“the Lloyd’s
Syndicate Instructions”).
We have audited the syndicate annual accounts included within the Report and Accounts the “Annual Report”), which
comprise: the Balance sheet: assets and the Balance sheet: liabilities as at 31 December 2024; Profit and loss and other
comprehensive income: technical account – long-term business, Profit and loss and other comprehensive income: non-
technical account – long-term business, the Statement of cash flows and the Statement of changes in members’ balances
for the year then ended; and the notes to the syndicate annual accounts, which include a description of the significant
accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”), The Insurance
Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008, the Lloyd’s Syndicate Instructions and
other applicable law. Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the
audit of the syndicate annual accounts
section of our report. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the syndicate in accordance with the ethical requirements that are relevant to our audit of
the syndicate annual accounts in the UK, which includes the FRC’s Ethical Standard, as applicable to other entities of
public interest, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
not provided.
Other than those disclosed in note 4, we have provided no non-audit services to the syndicate in the period under audit.
Conclusions relating to going concern
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the syndicate’s ability to continue as a going concern for a
period of at least twelve months from when the syndicate annual accounts are authorised for issue.
In auditing the syndicate annual accounts, we have concluded that the Managing Agent’s use of the going concern basis
of accounting in the preparation of the syndicate annual accounts is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the
syndicate's ability to continue as a going concern.
Our responsibilities and the responsibilities of the Managing Agent with respect to going concern are described in the
relevant sections of this report.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
1
2
Reporting on other information
The other information comprises all of the information in the Annual Report other than the syndicate annual accounts and
our auditors’ report thereon. The Managing Agent is responsible for the other information. Our opinion on the syndicate
annual accounts does not cover the other information and, accordingly, we do not express an audit opinion or, except to
the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the syndicate annual accounts, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the syndicate annual accounts or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material
misstatement of the syndicate annual accounts or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to report
that fact. We have nothing to report based on these responsibilities.
With respect to the Report of the Directors of the managing agent (the “Managing Agent’s Report”), we also considered
whether the disclosures required by The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts)
Regulations 2008 have been included.
Based on our work undertaken in the course of the audit, The Insurance Accounts Directive (Lloyd’s Syndicate and
Aggregate Accounts) Regulations 2008 requires us also to report certain opinions and matters as described below.
Managing Agent’s Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Managing Agent’s
Report for the year ended 31 December 2024 is consistent with the syndicate annual accounts and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the syndicate and its environment obtained in the course of the audit, we
did not identify any material misstatements in the Managing Agent’s Report.
Responsibilities for the syndicate annual accounts and the audit
Responsibilities of the Managing Agent for the syndicate annual accounts
As explained more fully in the Statement of managing agent’s responsibilities
,
the Managing Agent is responsible for the
preparation of the syndicate annual accounts in accordance with the applicable framework and for being satisfied that
they give a true and fair view. The Managing Agent is also responsible for such internal control as they determine is
necessary to enable the preparation of syndicate annual accounts that are free from material misstatement, whether due
to fraud or error.
In preparing the syndicate annual accounts, the Managing Agent is responsible for assessing the syndicate’s ability to
continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis
of accounting unless the syndicate is unable to continue to realise its assets and discharge its liabilities in the ordinary
course of business
.
Auditors’ responsibilities for the audit of the syndicate annual accounts
Our objectives are to obtain reasonable assurance about whether the syndicate annual accounts as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these syndicate annual accounts.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the syndicate and industry, we identified that the principal risks of non-compliance with
laws and regulations related to breaches of regulatory principles, such as those governed by the Prudential Regulation
Authority and the Financial Conduct Authority, and those regulations set by the Council of Lloyd’s, and we considered the
extent to which non-compliance might have a material effect on the syndicate annual accounts. We also considered those
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
1
3
laws and regulations that have a direct impact on the syndicate annual accounts such as The Insurance Accounts Directive
(Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and the Lloyd’s Syndicate Instructions. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the syndicate annual accounts (including the
risk of override of controls), and determined that the principal risks were related to the posting of inappropriate journals
and management bias in accounting estimates Audit procedures performed by the engagement team included:Discussions
with management, internal audit and the risk and compliance functions, including consideration of known or suspected
instances of non-compliance with laws and regulation and fraud;
•
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular
in relation to valuation of the long-term business provision and pipeline premium income;
•
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations
impacting revenue, journals posted by senior management and/or those posted late in the year end close process;
and
•
Reviewing relevant meeting minutes including those of the Conflicts Committee, Risk, Capital & Compliance Committee
and Audit Committee and correspondence with regulatory authorities, including Lloyd’s of London and the Prudential
Regulation Authority.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
syndicate annual accounts. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the syndicate annual accounts is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the syndicate’s member
in accordance with part 2
of The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 and for no other
purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in
writing.
Other required reporting
Under The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008 we are required
to report to you if, in our opinion:
●
we have not obtained all the information and explanations we require for our audit; or
●
adequate accounting records have not been kept by the Managing Agent in respect of the syndicate; or
●
certain disclosures of Managing Agent remuneration specified by law are not made; or
●
the syndicate annual accounts are not in agreement with the accounting records.
We have no exceptions to report arising from this responsibility.
Other matter
We draw attention to the fact that this report may be included within a document to which iXBRL tagging has been applied.
This auditors’ report provides no assurance over whether the iXBRL tagging has been applied in accordance with section
2 of the Lloyd’s Syndicate Instructions version 2.0.
William Lewis (Senior statutory auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
5 March 2025
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
14
Profit and loss and other comprehensive income
Technical account
long-term business for the year ended 31 December 2024
Note
2024
£
2023*
£
Gross premiums written
3
Outward reinsurance premiums
Premiums written, net of reinsurance
Change in the gross provision for unearned premiums
8
8
(285 )
(258 )
Net change in provisions for unearned premiums
(285
)
(258 )
Earned premiums, net of reinsurance
Allocated investment return transferred from the non-technical
account
7
Claims paid
-
Gross amount
(278 )
(1,006 )
Net claims paid
(278 )
(1,006 )
Claims incurred, net of reinsurance
(278 )
(1,006 )
Changes in other technical provisions, net of reinsurance, not shown
under other headings
Long term business provision, net of reinsurance
-
Gross amount
8
Net change in long term business provisions
Other technical provisions, net of reinsurance
Net change in other technical provisions
Net operating expenses
4,5,6
(967 )
(753 )
Balance on the technical account
long-term business
*Please refer to the Restatement of comparative information section in note 1.1.
All operations are continuing.
The notes to the annual accounts and significant accounting policies form part of these annual accounts
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
15
Profit and loss and other comprehensive income
Non-technical account
long-term business for the year ended 31 December
2024
Note
2024
£
2023*
£
Balance on the technical account - long-term business
Investment income
7
Realised gains on investments
7
Unrealised (losses)/gains on investments
7
(22 )
Investment expenses and charges
7
(2 )
(1 )
Total investment return
Allocated investment return transferred to the long-term business
technical account
(624 )
(626 )
Gain/(loss) on foreign exchange
(4 )
Profit for the financial year
Total comprehensive income for the year
*Please refer to the Restatement of comparative information section in note 1.1.
There is no other comprehensive income. Accordingly, a separate statement of other comprehensive income has not been
provided.
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
16
Balance sheet: assets
as at 31 December 2024
Note
2024
£
2023
£
Financial investments
21
Investments
Provision for unearned premiums
8
Reinsurers share of technical provisions
Debtors arising out of direct insurance operations
10
Debtors arising out of reinsurance operations
11
Other debtors
12
Debtors
Cash at bank and in hand
13
Other (Overseas deposits)
Other assets
Total assets
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
17
Balance sheet: liabilities
as at 31 December 2024
Note
2024
£
2023
£
Member
s balances
Total Capital and reserves
Long-term business provision
8,9
Other technical provisions
Technical provisions
Creditors arising out of direct insurance operations
16
Creditors arising out of reinsurance operations
17
Other creditors including taxation and social security
18
Creditors
Total liabilities
Total liabilities, capital and reserves
The annual accounts, which comprise the Profit and loss and other comprehensive income: technical account
long-term
business, Profit and loss and other comprehensive income: non-technical account, Balance sheet: assets, Balance sheet:
liabilities, Statement of changes in member
s balances, Statement of cash flows and Notes to the annual accounts and
significant accounting policies, were approved by the Board of Tokio Marine Kiln Syndicates Limited on 5 March 2025 and
were signed on its behalf by:
R Patel
Deputy Chief Executive Officer & Chief Financial Officer
Tokio Marine Kiln Syndicates Limited
5 March 2025
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
18
Statement of changes in member
s balances
for the year ended 31 December 2024
2024
£
2023
£
Member
s balances brought forward at 1 January
Total comprehensive income for the year
Member
s balances carried forward at 31 December
The member participates on the Syndicate by reference to years of account and ultimate results, assets and liabilities are
assessed with reference to policies incepting in that year of account in respect of its membership of a particular year.
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
19
Statement of cash flows
for the year ended 31 December 2024
2024
£
2023
Restated*
£
Cash flows from operating activities:
Profit for the financial year
Decrease in gross technical provisions
(551 )
(1,795 )
(Increase)/decrease in debtors
(407 )
Decrease in creditors
(601 )
(750 )
Movement in other assets/liabilities
(294 )
Investment return
(624 )
(626 )
Foreign exchange
(96 )
Net cash flows from operating activities
(307 )
(1,180 )
Cash flows from investing activities:
Purchase of equity and debt instruments
(6,738 )
(6,950 )
Sale of equity and debt instruments
Investment income received
Net cash flows from investing activities
(705 )
(4,615 )
Net decrease in cash and cash equivalents
(1,012 )
(5,795 )
Cash and cash equivalents at beginning of year
Foreign exchange on cash and cash equivalents
(7 )
(3 )
Cash and cash equivalents at the end of the year
*Please refer to the Restatement of comparative information section in note 1.1.
The notes to the annual accounts and significant accounting policies form part of these annual accounts.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
20
Notes to the annual accounts and significant accounting policies
1.
Accounting policies
1.1
Statement of compliance
These annual accounts have been prepared in accordance with Regulation 5 of
Syndicate and Aggregate Accounts) Regulations 2008 and Accounting Standards in the United Kingdom, including
the Republic
, and
Accounts Instructions Version 2.0 as modified by the Frequently Asked Questions Version 1.1
. The long-
term business result is determined on an annual basis of accounting.
These annual accounts are prepared under the historical cost convention, as modified by the recognition of certain financial
assets and liabilities measured at fair value.
The preparation of annual accounts requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the syndicate accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the annual accounts, are
disclosed in note 2.
These annual accounts are presented in pounds sterling, which is the functional currency of the Syndicate. All amounts
have been rounded to the nearest thousand pounds, unless otherwise stated.
Restatement of comparative information
During 2024, Lloyd's introduced changes to the syndicate accounts process to rationalise and standardise financial
reporting across the market. As a result, certain comparative information has been restated to ensure consistency with
current year presentation and compliance with the Lloyd's Syndicate Accounts Instructions. The changes comprise:
a) Reclassification and Aggregation changes
Certain financial statement line items have been reclassified whilst the underlying amounts remain unchanged. To align
with Lloyd's reporting requirements whilst maintaining FRS 102 compliance, certain items have been aggregated or
disaggregated within the financial statements and related notes. This includes the presentation of realised and unrealised
gains and losses on investments, which are now shown on a disaggregated basis in the
rofit and loss and other
comprehensive income: non-technical account
long-
b) Correction of error
During the review of financial statement presentation, it was identified that certain short-term, highly liquid cash
equivalents as defined under paragraph 7.2 of FRS 102 had been omitted from the opening and closing cash equivalents
in the Statement of cash flows. The restated Statement of cash flows is shown below:
Statement of cash flows
2023
£
Restatement
£
2023
(restated)
£
Net cash flows from operating activities
(1,180)
-
(1,180)
Purchase of equity and debt instruments
(7,889)
939
(6,950)
Sale of equity and debt instruments
8,146
(6,430)
1,716
Investment income received
620
(1)
619
Net cash flows from investing activities
877
(5,492)
(4,615)
Net decrease in cash and cash equivalents
(303)
(5,492)
(5,795)
Cash and cash equivalents at beginning of year
537
14,850
15,387
Foreign exchange on cash and cash equivalents
(3)
-
(3)
Cash and cash equivalents at the end of the year
231
9,358
9,589
The reclassification and aggregation changes in (a) above have been applied retrospectively and had no impact on
previously reported profit, total comprehensive income, total assets, total liabilities, or total capital and reserves. The
restatement in (b) above increased the overall cash and cash equivalents reported in the Statement of cash flows by
£9,358,000 but did not impact the overall asset position recognised in the Balance sheet: assets account.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
21
1.2
New standards and amendments
The Syndicate has applied FRS 102 and FRS 103 as issued in September 2024, which reflects the amendments made
since the previous editions were issued in 2022.
FRS 102 is subject to a periodic review at least every five years. In December 2022, the Financial Reporting Council
published its periodic review of amendments to FRS 102 (FRED 82). The proposed effective date for these amendments
is accounting periods beginning on or after 1 January 2026, with early application permitted (provided all amendments
are applied at the same time).
The proposed amendments within FRED 82 are focussed on updating accounting requirements to reflect changes in
International Financial Reporting Standards (IFRS), particularly with respect to the following:
The proposed basis for revenue accounting will align to IFRS 15 Revenue from Contracts with Customers, and a
five-step model for revenue recognition, with appropriate simplifications.
The proposed basis for lease accounting will align to IFRS 16 Leases, and an on-balance-sheet model, with
appropriate simplifications.
The Syndicate has not applied any amendments from FRED 82 for the year ended 31 December 2024 and will assess the
impact of the publication in future accounting periods.
funds are intended primarily to cover circumstances where syndicate assets prove insufficient to meet participating
member
s underwriting liabilities.
resource criteria. FAL has regard to a number of factors, including the nature and amount of risk to be underwritten by
the member and the assessment of the reserving risk in respect of business that has been underwritten. Since FAL is not
under the management of the managing agent, no amount has been shown in these annual accounts by way of such
capital resources. However, the managing agent is able to make a call on the member
s FAL to meet liquidity requirements
or to settle losses.
1.4
Going concern
The Directors consider it appropriate to adopt the going concern basis of accounting in preparing the annual accounts.
The following are key factors that the Directors have considered in adopting the going concern basis of accounting:
Member level solvency:
complies with Solvency II requirements, and beyond to meet its own financial strength, licence and ratings
objectives.
A single market rating has been applied to Lloyd
A- Very Strong), Fitch (AA- Very
Strong), AM Best (A Excellent) and Kroll Bond (AA- Stable).
Cash flow forecasting and monitoring: Cash flow forecasts for the next 12 months are prepared on a regular basis.
Reinsurance purchasing: The Syndicate has purchased reinsurance to manage insurance risk and reinsurer credit
ratings are assessed at placement, and where credit ratings are not sufficient, collateral is requested to mitigate
liquidity risk.
Approved run-off plan: The Syndicate is in run-off but will continue to operate for the foreseeable future in
accordance with a plan approved by the Directors of the managing agent.
1.5
Summary of accounting policies
The significant accounting policies adopted in the preparation of the annual accounts are set out below. They have been
applied consistently to all periods presented in these annual accounts.
a. Product classification
Insurance contracts are defined as those containing significant insurance risk at the inception of the contract, or those
where at the inception of the contract there is a scenario with commercial substance where the level of insurance risk
may be significant. The significance of insurance risk is dependent on both the probability of an insured event and the
magnitude of its potential effect.
b. Premiums written
Inwards premiums written comprise premiums on contracts incepting during the financial year as well as adjustments
made in the year to premiums on contracts incepting in prior accounting periods. Premiums are shown gross of brokerage
payable and exclude taxes and duties levied on them. Estimates are made for pipeline premiums on a risk-by-risk basis,
representing the difference between the written and signed premium.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
22
Single premium life contracts consist of those contracts under which there is no expectation of continuing premiums being
ncluded
within single premiums.
Periodic premium life contracts include those contracts under which premiums are payable at regular intervals during the
policy year, including repeated or recurrent single premiums where the level of premiums is defined. For policies with
recurrent single premiums and a policy term of greater than 12 months, premium is written on an annual basis at the
anniversary of inception.
Outwards reinsurance premiums are accounted for in the same accounting period as the premiums for the related direct
or inwards business being reinsured.
c. Earned premiums
For policies reserved under a long-term methodology, written premium is treated as fully earned from inception, on the
anniversary of inception, or using an earning pattern based on time apportionment. No unearned premium reserve is
held.
d. Claims paid and incurred
Paid claims represent all claims paid during the year and include claims handling expenses. Claims incurred comprise paid
claims and changes in the long-term business provision.
e. Long-term business provision and related recoveries
The long-term business provision is determined annually with reference to an external actuarial valuation. That valuation
uses a gross premium valuation methodology to calculate the provision required to meet future expected claims and
An additional allowance is held for potential downside uncertainty. This uncertainty is heightened given the small and
reducing volume of business across the portfolio with an increased level of reserve volatility as individual claims reflect a
high proportion of the remaining reserves.
The long-term business provision includes an additional expense reserve to cover the future costs associated with
maintaining the long-term contracts. The level of expenses is based on a prudent assessment of the expected costs,
necessary to maintain the in-force policies.
Reinsurance recoveries are accounted for in the same period as the incurred claims for the related business. The
irrecoverable amounts.
f. Provision for unexpired risks
Provision is made for any deficiencies arising when unearned premiums, net of associated acquisition costs, are insufficient
to meet expected claims and expenses after taking into account future investment return on the investments supporting
the unearned premiums provision. The need for an unexpired
Unexpired risks surpluses and deficits are offset where business classes are managed together and a provision is made if
an aggregate deficit arises. The unexpired risks provision is included within other technical provisions.
All reasonable steps are taken to ensure that the appropriate information regarding claims exposures is obtained. The
calculation is based upon statistical analyses of historical experience, which assumes that the development pattern of
premiums and claims will be similar to past experience. However, given the uncertainty in establishing a provision for
unexpired risks, it is expected that the final outcome will prove to be different from the original liability established.
g. Net operating expenses and personal expenses
Net operating expenses comprise the cost of acquiring business including commission, profit commission and reinsurance
commission income as well as the staff costs and other expenses attributable to underwriting operations.
Net operating expenses and personal expenses are recognised on the accruals basis and represent the expenses incurred
on underwriting operations.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
23
h. Finance costs
Finance costs comprise interest paid and bank charges together with facility fees on letters of credit and are recorded in
the period in which they are incurred.
i. Acquisition costs
Acquisition costs, comprising commission and other costs related to the acquisition of new insurance contracts are deferred
to the extent that they are attributable to premiums unearned at the balance sheet date. Where inwards business is ceded
to an outwards proportional reinsurance treaty, an estimate of the relevant proportion of the inwards acquisition costs is
calculated and deferred in line with the outwards unearned premium at the balance sheet date.
j. Foreign currencies
Functional and presentation currency
Items included in the annual accounts are measured using the currency of the primary economic environment in which
the Syndicate operates (the functional currency). The annual accounts are presented in pounds sterling which is also the
functional currency of the Syndicate.
Transactions and balances
Foreign currency transactions are recorded in the functional currency using the exchange rates prevailing at the dates of
the transactions or an appropriate average rate of exchange. At each period end foreign currency monetary items are
translated using the closing rate. For this purpose, all assets and liabilities arising from insurance contracts (including
unearned premiums, deferred acquisition costs and unexpired risks provisions) are monetary items.
Foreign exchange gains and losses resulting from the settlement of transactions and from the measurement at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the non-technical
account.
Exchange rates used are as follows:
2024
2023
Start of
period rate
End of
period rate
Average
rate
Start of
period rate
End of
period rate
Average
rate
Sterling
Euro
US dollar
Canadian dollar
Australian dollar
Japanese Yen
The distributable result on closing a year of account is calculated using the exchange rates prevailing at the date of
closure.
k. Financial investments
The Syndicate has chosen to adopt Sections 11 and 12 of FRS 102
ther Financial
Instruments Issues
Financial instruments are initially recorded at cost, which equates to fair value, and subsequently carried at fair value
through profit or loss.
Financial instruments that are designated as fair value through profit or loss are classified using a fair value hierarchy
that reflects the significance of the inputs used in these measurements.
Level 1: the fair value of financial instruments is derived using unadjusted quoted prices in an active market for
identical assets or liabilities at the measurement date. These instruments include government bonds and securities
using quoted prices in an active market.
Level 2: the fair value of financial instruments is derived using inputs other than quoted prices included within
level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly.
These instruments include regularly traded government agency bonds, supranational bonds, corporate bonds,
money market and open-ended funds.
Level 3: financial instruments are derived from inputs that are not observable. Unobservable inputs are used to
measure fair value to the extent that relevant observable inputs are not available and may include internal data
or models. Assumptions from market participants may be used to formulate the valuation of certain assets and
liabilities.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
24
All regular purchases of financial investments are recognised on the trade date, being the date the Syndicate commits to
purchase the asset. All regular sales of financial investments are recognised at the earlier of the trade date and maturity
date.
A financial asset is derecognised when the contractual right to receive cash flows expires or where they have been
transferred and the Syndicate has also substantially transferred all risks and rewards of ownership. A financial liability is
derecognised once the obligation under the liability is discharged, cancelled or expires.
l. Derivative financial instruments
Derivatives are initially recognised at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at their fair value. Changes in the fair value are recognised immediately in the profit and loss
account. Fair values are obtained from quoted market prices in active markets, including recent market transactions. All
derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
The best evidence of the fair value of a derivative at initial recognition is the transaction price (i.e. the fair value of the
consideration given or received) unless the fair value of that instrument is evidenced by comparison with other observable
current market transactions in the same instrument (i.e. without modification or repackaging) or based on a valuation
technique whose variables include only data from observable markets.
m. Debtors and creditors arising out of direct and reinsurance operations
Debtors and creditors arising out of direct and reinsurance operations are initially recognised at transaction price and are
subsequently carried at the recoverable amount. The carrying value is reviewed for impairment whenever events or
circumstances indicate that the carrying amount is greater than the recoverable amount, with the impairment adjustment
recorded in the profit and loss account. Debtors arising out of direct insurance and reinsurance operations are stated net
of specific provisions against doubtful debts which are made on the basis of reviews conducted by management.
n. Other debtors and creditors
Any other debtors and creditors are recognised initially at transaction price and subsequently carried at the recoverable
amount. The carrying value of other debtors is reviewed for impairment whenever events or circumstances indicate that
the carrying amount is greater than the recoverable amount, with the impairment adjustment recorded in the profit and
loss account. All other debtors and creditors are due within one year, unless otherwise stated.
o. Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand, deposits held at call with banks and other short-term highly
liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of
changes in value.
Bank overdrafts, when applicable, are shown within borrowings in current liabilities. These are measured at cost less any
allowance for impairment.
p. Overseas deposits
Overseas deposits are lodged as a condition of conducting underwriting business in certain countries. These are initially
recorded at cost, which equates to fair value, and subsequently carried at fair value through profit or loss.
q. Investment return
Investment return comprises all investment income, realised investment gains and losses and movements in unrealised
gains and losses, net of investment management expenses, including interest. Realised gains and losses on investments
carried at fair value through profit or loss are calculated as the difference between sale proceeds and the fair value at the
previous balance sheet date, or purchase price if acquired during the year. Unrealised gains and losses on investments
represent the difference between the fair value at the balance sheet date and the fair value at the previous balance sheet
date, or purchase price if acquired during the year.
Investment return on long-term business is initially recorded in the non-technical account. A transfer is made from the
non-technical account to the long-term business technical account. Investment return has been wholly allocated to the
technical account as all investments relate to the technical account.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
25
r. Investment yield
expressed as a percentage. Aggregate investment return is the total amount of net appreciation/losses, investment
income and accrued interest received during the year, after deducting investment management costs but before deducting
tax. Average funds available is the average value of all investments (including accrued interest), deposits and surplus
cash at the beginning of the year and at each quarter-end revalued at market prices.
s. Taxation
Under Schedule 19 of the Finance Act 1993 the Syndicate does not pay UK taxation, its profits being allocated and
assessed to tax on its member in direct proportion to their capacity.
The Syndicate pays various overseas direct and premium based taxes, the majority of which are allocable to its member
in direct proportion to its capacity and which can be claimed by the member either as double tax relief or as an expense
against tax liabilities.
t. Pension costs
TMK operates a defined contribution scheme. A defined contribution plan is a pension plan under which a fixed contribution
is paid into a separate entity. Once the contributions have been paid TMK has no further payment obligations. Pension
contributions relating to syndicate staff are charged to the Syndicate and included within net operating expenses.
u. Profit commission
Profit commission is charged by the managing agent at a rate of 17.5% of profit subject to the operation of a two year
deficit clause. Final settlement to the managing agent is made when the year of account closes. Profit commission is
estimated on an ultimate basis for each year of account and accrued by the Syndicate on a straight-line basis to the
extent it is probable (more likely than not) that the Syndicate will be required to transfer economic benefits in settlement.
v. Provisions
A provision is recognised when the Syndicate has a present legal or constructive obligation, as a result of a past event,
that is expected to result in an outflow of resources. A provision is recognised when a reliable estimate of the amount of
the obligation can be made.
w. Current and non-current disclosure
For each asset and liability line item that combines amounts expected to be recovered or settled (a) no more than 12
months after the year-end date and (b) more than 12 months after the year-end date, the relevant note discloses the
amount expected to be recovered or settled after more than 12 months.
x. Contingencies
Contingent liabilities arise as a result of past events when either it is not probable that there will be an outflow of resources
or that the amount cannot be reliably measured at the reporting date or when the existence will be confirmed by the
occurrence or non-occurrence of uncertain future events not wholly within the S
are disclosed in the annual accounts unless the probability of an outflow of resources is remote.
y. Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet only when there is a legally
enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the
assets and settle the liability simultaneously.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
26
2.
Use of critical accounting estimates and judgements in applying accounting policies
The preparation of the Syndicate annual accounts requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Syndicate accounting policies. The areas involving
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the annual
accounts are those listed below. The judgements and estimation uncertainty are disclosed within the individual accounting
policies:
Long-term
business
provision
TMKS adopts a prudent reserving methodology in valuing the long-
term business provision due to a
number of material uncertainties. The estimation of the long-term business provision
is generally
subject to a greater degree of uncertainty than the estimatio
n of the cost of settling claims already
notified to the Syndicate
, where more information about the claim event is generally available. In
calculating the estimated cost of unpaid and potential future claims the Syndicate
uses a variety of
estimation tech
niques, generally based upon statistical analyses of historical experience, which
assumes that the development pattern of the current claims and future claims activity
will be
consistent with past experience. Allowance is made, however, for changes or unce
rtainties which may
create distortions in the underlying statistics or which might cause the cost of unsettled claims to
increase or reduce when compared with the cost of previously settled claims including:
changes in processes which might accelerate or s
low down the development and/or recording of
paid or incurred claims compared with the statistics from previous periods;
changes in the legal environment;
changes in the mix of business; and
the impact of large losses.
TMKS holds a reserve surplus compared to the external actuarial valuation,
with a greater allowance
for potential downside uncertainty. This uncertainty is heightened given
the small and reducing volume
of business across the portfolio with an increased level of reserve volatility as individual claims
reflect
a high proportion of the remaining reserves.
The long-
term business provision includes an established additional expense reserve to cover the
future costs associated with maintaining the long-term non-UNFCU contracts.
The level of expenses
is based on a prudent assessment of the expected costs, necessary to maintain the in-force policies.
The external valuation adopts a gross premium valuation method as described in the
Long-
term
business provision and related recoveries
accounting policy.
The principal assumptions for the gross premium valuation method for all components of the long-
term business provision aside from the UNFCU policy are:
The valuation interest rate and claims discount rate is the risk free rate published by the PRA
as
at 31 December 2024 (2023: risk-free discount rate published by the PRA
as at 31 December
2023);
Renewal expenses are 154.9% of regular premiums (2023: 116.0%);
Where policies have been underwritten, 110.0% (2023: 110.0%) of the TM/F16 (2023: TM/F16
)
select tables were used. Where policies have not been underwritten, the ultimate tables were
used (2023: same). Where smoker status is known, the smoker/non-smoker specific mortality
sub-tables have been used (2023: same). Where smoker status is unknown, it is assumed that
90.0% (2023: 90.0%) of policyholders are non-smokers and 10.0% (2023: 10.0%) are smokers.
Following the issuance of the consent order by the NYDFS in November 2017, the UNFCU contract for
the US insured lives changed from an annually renewable group life contract reserved using short-
term methodologies into term life policies until age 71 reserved using long-term life reserving
techniques. The principal assumptions for the gross premium valuation method in respect of the
UNFCU policy for the US insured lives, are:
The valuation interest rate and claims discount rate is the risk free rate published by the PRA
as
at 31 December 2024 (2023: risk-free discount rate published by the PRA
as at 31 December
2023);
The renewal expenses are nil% of regular premiums (2023: nil%), as TMKS has committed to
pay all future expenses and not recharge this to the Syndicate;
Mortality is 120.0% (2023: 120.0%) of the TM16 (2023: TM16) tables for males and 115.0%
(2023: 115.0%) of the TM16 (2023: TM16) tables for females.
Where smoker status is unknown,
it is assumed that 90.0% (2023: 90.0%) of policyholders are non-smokers and 10.0% (2023
:
10.0%) are smokers.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
27
Provisions are calculated gross of any reinsurance recoveries. A
separate estimate is made of the
amounts that will be recoverable from reinsurers based upon the gross provisions and having due
regard to collectability. An estimate of the future cost of indirect claims handling is calculated as a
percentage of the claims reserves held at the balance sheet date.
Written
premium &
Pipeline
premium
Written premium is reported according to management estimation of when premium will be written.
An estimate of premiums written during the year is made on a risk-by-risk basis. P
ipeline premium is
booked as written. For outwards reinsurance premium
an assessment is made of the related unearned
premium provision.
For periodic premium life contracts with recurrent single premiums and a policy term of greater than
12 months, premium is written on an annual basis, at anniversary of inception.
Earned
premium
Earned premium is estimated based on assumptions of how each risk is earned according to its method
of placement and class of business. This approach is applied consistently year-on-year. The earning
of premiums is based primarily on time apportionment.
For policies reserved under a long-
term methodology, written premium is treated as fully earned from
inception, on the anniversary of inception, or using an earning pattern based on time apportionment
.
No unearned premium reserve is held.
Provision
for
unexpired
risks
All reasonable steps are taken to ensure that the appropriate information regarding claims exposures
is obtained. The calculation is based upon statistical analyses of historical experience, which assumes
that the development pattern of premium and claims will be similar to past experience. However,
given the uncertainty in establishing a provision for unexpired risks, it is expected that the final
outcome will prove to be different from the original liability established.
Reinsurance
recoverable
Reinsurance is deemed to be fully recoverable unless there is reason to doubt its recoverability. In
these circumstances specific provisions are made based on the expected proportional recovery and
the credit risk profile of the counterparties.
Financial
investments
Financial investments are carried in the balance sheet at fair value. Market valuations of funds are
obtained from fund administrators. The fair value of Level 3 financial instruments, which
are those
where no active market exists or where quoted prices are not otherwise available,
is determined by
using valuation techniques. To the extent that valuations are
based on models or inputs that are
unobservable in the market, the determination of fair value requires more judgement and accordingly,
those instruments will require a greater degree of judgement to be exercised during valuation.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
28
3.
Analysis of underwriting result
An analysis of the result before investment return is presented below:
Gross
premiums
written
Gross
premiums
earned
Gross
claims
incurred
Gross
operating
expenses
Reinsurance
balance
Underwriting
result
2024
Direct insurance
Life
1,587
1,594
281
(774)
(69)
1,032
Total direct insurance
1,587
1,594
281
(774)
(69)
1,032
Reinsurance acceptances
404
397
54
(193)
(17)
241
Total
1,991
1,991
335
(967)
(86)
1,273
2023
Direct insurance
Life
657
674
171
(433)
(144)
268
Total direct insurance
657
674
171
(433)
(144)
268
Reinsurance acceptances
515
498
341
(320)
(106)
413
Total
1,172
1,172
512
(753)
(250)
681
All business written by the Syndicate is life insurance and is concluded in the UK. The direct gross written premium can
be further analysed as follows:
2024
2023
Individual premiums
1,584
785
Premiums under group contracts
3
(128)
1,587
657
Periodic premiums
1,584
785
Single premiums
3
(128)
1,587
657
The geographical analysis of premium by location of client is as follows:
2024
2023*
United Kingdom
514
437
US
969
672
Rest of the world
508
63
Total gross premiums written
1,991
1,172
*Please refer to the Restatement of comparative information section in note 1.1.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
29
4.
Net operating expenses
2024
2023
Acquisition costs
690
477
Administrative expenses
277
276
Net operating expenses
967
753
Total commission for direct insurance business for the year amounted to:
2024
2023
Total commission for direct insurance business
552
274
2024
2023
Fees payable to
s for the audit of these financial
statements
128
122
F
s and its associates in respect of
other services pursuant to legislation
69
52
Total
197
174
The charge incurred for other services pursuant to legislation relates to the audit and
returns and these financial statements. The charge in 2024 also includes fees relating to the iXBRL tagging of these
financial statements.
Audit fees are billed combined for the TMK group and the Syndicate and are paid by a fellow subsidiary of TMKGL. A
recharge of audit fees is made to the Syndicate.
5.
Staff costs
The Syndicate and its managing agent have no employees. Staff are employed by Tokio Marine Kiln Insurance Services
Limited (TMKIS). The following amounts were recharged to the Syndicate in respect of salary costs and are included within
administrative expenses:
2024
2023
Wages and salaries
94
95
Social security costs
27
26
Total
121
121
6.
Emoluments
The Directors of TMKS received the following aggregate remuneration in relation to their work on the Syndicate:
2024
2023
moluments
39
29
Of the above amount, £8,000 (2023: £8,000) was charged to the Syndicate as an expense, with the remainder borne by
other group entities.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
30
The run-off manager received the following remuneration charged as a syndicate expense:
2024
2023
Emoluments
70
78
7. Investment return
2024
2023*
Interest and similar income
From financial instruments designated at fair value through profit or loss
Interest and similar income
361
405
Interest on cash at bank
23
30
Other income from investments
From financial instruments designated at fair value through profit or loss
Gains on the realisation of investments
292
185
Losses on the realisation of investments
(28)
-
Unrealised gains on investments
33
24
Unrealised losses on the investments
(55)
(17)
Investment management expenses
(2)
(1)
Total investment return
624
626
Transferred to the technical account from the non-technical account
624
626
*Please refer to the Restatement of comparative information section in note 1.1.
8.
Technical provisions
The reconciliation of the opening and closing provision for unearned premiums is as follows:
Gross
Reinsurance
Net
2024
Unearned premiums
Balance at 1 January
-
(710)
(710)
Premiums written in the year
1,991
199
2,190
Premiums earned during the year
(1,991)
86
(1,905)
Foreign exchange adjustments
-
1
1
Balance at 31 December
-
(424)
(424)
2023
Balance at 1 January
-
(968)
(968)
Premiums written in the year
1,172
8
1,180
Premiums earned during the year
(1,172)
250
(922)
At 31 December
-
(710)
(710)
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
31
The reconciliation of the opening and closing long-term business provision is as follows:
Gross
Reinsurance
Net
2024
Long-term business provision
Balance at 1 January
6,080
-
6,080
Movement in provision
(609)
-
(609)
Foreign exchange movements
61
-
61
Balance at 31 December
5,532
-
5,532
2023*
Balance at 1 January
7,873
-
7,873
Movement in provision
(1,518)
-
(1,518)
Foreign exchange movements
(275)
-
(275)
Balance at 31 December
6,080
-
6,080
*Please refer to the Restatement of comparative information section in note 1.1.
9.
Claims development
Within the calendar year technical result, a surplus of £46,000 (2023: deficit of £201,000) relates to the reassessment of
net claims incurred for previous accident years.
The following tables show the development of gross and net claims within the long-term business provision over the last 10
years. The claims development tables are prepared on an underwriting year of account basis and therefore reflect the pattern
of earned premium and risk exposure over a number of years. All figures are shown converted at current year-end rates.
The Syndicate is required to hold additional reserves under rules for syndicates with long-term insurance liabilities. The
total outstanding claims reserve shown in the tables below includes the allowance made for these additional reserves
which are accounted for in the net claims outstanding amount shown on the balance sheet. Outstanding claims are shown
within in the long-term business provision in the balance sheet.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
32
Gross:
2015
2016
2017
2018
Total
Pure underwriting year
Estimate of gross claims
at end of underwriting year
10,193
8,191
10,611
9,097
one year later
16,669
28,073
24,506
8,756
two years later
19,950
26,757
28,773
8,022
three years later
19,421
27,618
29,464
7,740
four years later
19,318
26,170
29,286
7,725
five years later
19,268
26,046
28,799
7,695
six years later
19,260
25,795
28,131
7,277
seven years later
19,260
25,794
28,573
-
eight years later
19,260
25,794
-
-
nine years later
19,257
-
-
-
Estimate of gross claims reserve
19,257
25,794
28,573
7,277
80,901
Provision in respect of prior years
-
-
-
-
35
Less: gross claims paid
(19,257)
(25,794)
(26,123)
(4,216)
(75,390)
Gross claims reserve
-
-
2,450
3,061
5,546
Net:
2015
2016
2017
2018
Total
Pure underwriting year
Estimate of net claims
at end of underwriting year
10,187
8,188
10,183
9,097
one year later
16,669
28,074
24,149
8,756
two years later
19,514
26,757
28,400
8,022
three years later
18,985
27,618
29,115
7,717
four years later
18,882
26,170
27,474
7,715
five years later
18,832
26,065
26,989
7,450
six years later
19,287
25,814
25,399
7,033
seven years later
19,288
25,800
25,841
-
eight years later
19,283
25,800
-
-
nine years later
19,280
-
-
-
Estimate of net claims reserve
19,280
25,800
25,841
7,033
77,954
Provision in respect of prior years
35
Less: net claims paid
(19,280)
(25,800)
(23,391)
(3,972)
(72,443)
Net claims reserve
-
-
2,450
3,061
5,546
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
33
10.
Debtors arising out of direct insurance operations
2024
2023
Due within one year
549
49
Total
549
49
11.
Debtors arising out of reinsurance operations
2024
2023
Due within one year
292
341
Total
292
341
12.
Other debtors
2024
2023
Other
1
45
Total
1
45
13. Cash and cash equivalents
2024
2023
Cash at bank and in hand
309
231
Short term deposits with credit institutions
8,261
9,358
Total cash and cash equivalents
8,570
9,589
Included within cash and cash equivalents are the following amounts which are not available for use by the Syndicate:
2024
2023
Short term deposits with credit institutions
3,690
3,482
14. Analysis of net debt
At
1 January
2024
Cash flows
Fair value and
exchange
movements
At 31
December
2024
Cash and cash equivalents
9,589
(1,012)
(7)
8,570
Total
9,589
(1,012)
(7)
8,570
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
34
15.
Deferred acquisition costs
The reconciliation of the opening and closing deferred acquisition costs is as follows:
Gross
Reinsurance
Net
2024
Balance at 1 January
-
-
-
Incurred deferred acquisition costs
690
-
690
Amortised deferred acquisition costs
(690)
-
(690)
Foreign exchange movements
-
-
-
Balance at 31 December
-
-
-
2023
Balance at 1 January
-
-
-
Incurred deferred acquisition costs
477
-
477
Amortised deferred acquisition costs
(477)
-
(477)
Foreign exchange movements
-
-
-
Balance at 31 December
-
-
-
16.
Creditors arising out of direct insurance operations
2024
2023
Due within one year
1,053
1,310
Total
1,053
1,310
17.
Creditors arising out of reinsurance operations
2024
2023
Due within one year
435
812
Total
435
812
18. Other creditors including taxation and social security
2024
2023
Other related party balances (non-syndicates)
55
22
Total
55
22
19.
Off-balance sheet items
The Syndicate has not been party to an arrangement, which is not reflected in its balance sheet, where material risks
and benefits arise for the Syndicate.
20.
Related parties
Expenses of £276,000 (2023: £276,000) were recharged from TMKS for expenses paid on behalf of the Syndicate.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
35
21.
Financial Investments
Carrying Value
Cost
2024
2023
2024
2023
Shares and other variable yield securities and units in unit
trusts
4,572
4,937
4,572
4,937
Debt securities and other fixed income securities
6,362
5,661
6,364
5,626
Loans and deposits with credit institutions
3,906
3,482
3,906
3,482
Total financial investments
14,840
14,080
14,842
14,045
2024
2023
Financial assets measured at fair value through profit or loss
14,840
14,080
Total financial investments
14,840
14,080
22.
Risk management
Details of the S
in
a)
Insurance risk
Claims sensitivity analysis
The following table shows the impact of a ±5.0% sensitivity on the long-term business provision and represents the
impact on both the
2024
+5.0%
-5.0%
Long-term business provision
277
(277)
2023
Long-term business provision
304
(304)
b)
Financial risk
The Syndicate is exposed to a range of financial risks through its financial assets and financial liabilities. In particular, the
key financial risk is that the proceeds from financial assets are not sufficient to fund the obligations arising from insurance
policies as they fall due. The most important components of this financial risk are credit risk, liquidity risk and market risk
(including interest rate risk and currency risk).
These risks arise from open positions in interest rate and currency products, all of which are exposed to general and
specific market movements. The risks that the Syndicate primarily faces due to the nature of its investment and liabilities
are interest rate risk and currency risk.
Credit risk
For details of the management of the S
Report of the Directors of the managing
agent. The following table provides information regarding credit risk exposures of the Syndicate by classifying assets
according to the Standard &
credit ratings of the counterparties. Where a security has no credit rating, the rating
of the issuer is used.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
36
AAA
AA
A
Not
rated
Total
2024
Shares and other variable yield securities and units in unit trusts
4,571
-
-
-
4,571
Debt securities and other fixed income securities
-
6,362
-
-
6,362
Loans and deposits with credit institutions
-
-
3,907
3,907
Debtors arising out of direct insurance operations
-
26
-
523
549
Debtors arising out of reinsurance operations
-
-
-
292
292
Other (Overseas deposits)
52
132
-
-
184
Cash at bank and in hand
-
-
309
-
309
Other debtors and accrued interest
-
-
-
425
425
Total
4,623
6,520
4,216
1,240
16,599
2023*
Shares and other variable yield securities and units in unit trusts
4,937
-
-
-
4,937
Debt securities and other fixed income securities
-
5,661
-
-
5,661
Loans and deposits with credit institutions
-
-
3,482
-
3,482
Debtors arising out of direct insurance operations
-
-
-
49
49
Debtors arising out of reinsurance operations
-
-
-
341
341
Overseas deposits
89
226
-
-
315
Cash at bank and in hand
-
-
231
-
231
Other debtors and accrued interest
-
-
-
755
755
Total
5,026
5,887
3,713
1,145
15,771
*Please refer to the Restatement of comparative information section in note 1.1.
There was no potential reinsurance credit exposure to the Syndicate at 31 December 2024 (2023: no potential reinsurance
credit exposure). The Outwards Reinsurance team review the level of this exposure and take appropriate action where
necessary, including obtaining a letter of credit from reinsurers, related parties included.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
37
An aged analysis of financial assets past due is shown below:
Neither past
due nor
impaired
assets
Past due
but not
impaired
assets
Total
2024
Shares and other variable yield securities and units in unit trusts
4,571
-
4,571
Debt securities and other fixed income securities
6,362
-
6,362
Loans and deposits with credit institutions
3,907
-
3,907
Debtors arising out of direct insurance operations
65
484
549
Debtors arising out of reinsurance operations
292
-
292
Other (Overseas deposits)
184
-
184
Cash at bank and in hand
309
-
309
Other debtors and accrued interest
425
-
425
Total
16,115
484
16,599
Neither past
due nor
impaired
assets
Past due
but not
impaired
assets
Total
2023*
Shares and other variable yield securities and units in unit trusts
4,937
-
4,937
Debt securities and other fixed income securities
5,661
-
5,661
Loans and deposits with credit institutions
3,482
-
3,482
Debtors arising out of direct insurance operations
49
-
49
Debtors arising out of reinsurance operations
341
-
341
Other (Overseas deposits)
315
-
315
Cash at bank and in hand
231
-
231
Other debtors and accrued interest
755
-
755
Total
15,771
-
15,771
*Please refer to the Restatement of comparative information section in note 1.1.
For assets to be classified as past-due the contractual payments are in arrears by more than 30 days. An impairment
adjustment is recorded in the profit and loss: non-technical account for assets impaired. The Syndicate operates mainly
on a
past-due nor impaired basis and when evidence is available, sufficient collateral will be obtained for
-
due and
assets. An impairment assessment will also be performed if applicable. The financial assets and liabilities
in this set of accounts are all receivable/payable within 12 months after the year-end date.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
38
Liquidity risk
For details of the management of the S
liquidity risks please refer to
.
The Syndicate writes business which requires the deposit of appropriate monies in trust funds. Some of these trust funds
are regulated, requiring periodic assessment of the adequacy of funding. Surplus funds or additional funding requirements
are settled between the regulated and non-regulated trust funds. As at 31 December 2024, the balance held in the
regulated US trust fund was US $12,836,000 (2023: US $11,854,000).
The following table analyses the financial liabilities and gross claims provision into their relevant maturity groups based
on the remaining period at the year-end date to their contractual maturities or expected settlement dates. The projected
settlement of the gross claims provision is modelled using actuarial techniques. These estimates assume that future claims
settlement patterns will be broadly similar to those experienced in the past.
No
maturity
stated
0-1 yrs
1-3 yrs
3-5 yrs
>5 yrs
Total
2024
Claims outstanding
334
1,636
1,240
440
1,896
5,546
Creditors
-
1,543
-
-
-
1,543
Total
334
3,179
1,240
440
1,896
7,089
2023*
Claims outstanding
350
1,411
1,604
545
2,187
6,097
Creditors
-
2,144
-
-
-
2,144
Total
350
3,555
1,604
545
2,187
8,241
*Please refer to the Restatement of comparative information section in note 1.1.
Foreign currency market risk
For further details of the management of the S
market risk please refer to
.
The Syndicate maintains bank accounts and claims reserves in pounds sterling and US dollars (the
closing
currencies). Transactions arising in other currencies are translated to the
closing currencies as they occur. Certain
other currencies are held for regulatory purposes. The majority of the S
financial assets are denominated in the
same currencies as its insurance liabilities and thus the developing profit or loss that remains embedded within the
Syndicate gives rise to the main currency exposure. The profit or loss is distributed, or settled, in accordance with
rules using a combination of pounds sterling and US dollars after deduction of the member level charges.
Investment strategy is recommended and agreed by the Investment Committee. The Syndicate currency exposure and
future cash flows are monitored and shortfalls addressed by foreign currency transactions, hedges or cash calls on the
member.
A sizeable proportion of the S
business is written in currencies other than pounds sterling, in particular US
dollars. The S
business is therefore exposed to changes in exchange rates and there is no assurance that foreign
currency risk mitigation initiatives which the Syndicate undertakes will be successful in preventing any losses due to such
changes.
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
39
Sterling
US dollar
Euro
Other
Total
2024
Investments
4,572
10,268
-
-
14,840
Reinsurers' share of technical provisions
424
-
-
-
424
Debtors
204
502
136
-
842
Other assets
168
-
141
184
493
Total assets
5,368
10,770
277
184
16,599
Technical provisions
(1,473)
(4,047)
(26)
-
(5,546)
Creditors
(1,113)
(401)
(29)
-
(1,543)
Total liabilities
(2,586)
(4,448)
(55)
-
(7,089)
Total Capital and reserves
(2,782)
(6,322)
(222)
(184)
(9,510)
2023
Investments
4,747
9,333
-
-
14,080
Reinsurers' share of technical provisions
710
-
-
-
710
Debtors
106
284
45
-
435
Other assets
88
-
143
315
546
Total assets
5,651
9,617
188
315
15,771
Technical provisions
(1,931)
(4,166)
-
-
(6,097)
Creditors
(1,609)
(504)
(31)
-
(2,144)
Total liabilities
(3,540)
(4,670)
(31)
-
(8,241)
Total Capital and reserves
(2,111)
(4,947)
(157)
(315)
(7,530)
Exchange rate impact analysis
The analysis below is performed for possible movements in key variables, with all other variables held constant, showing
the impact on the result and net assets. The correlation of variables will have a significant effect in determining the
ultimate impact. However, to isolate and demonstrate the effect due to changes in variables, each variable has been
changed on an individual basis.
The following table gives an indication of the impact on the result and net assets or liabilities of a ten percent change in
the relative strength of the pound sterling against the value of the US dollar, excluding the effect of hedges.
2024
Impact on
results
before tax
2024
Impact on
member
s
balances
2023
Impact on
results before
tax
2023
Impact on
member
s
balances
Currency risk
10 percent increase in GBP/USD exchange rate
(702)
(702)
(550)
(550)
10 percent decrease in GBP/USD exchange rate
702
702
550
550
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
40
Interest rate market risk
For further details of the management of the S
market risk please refer to
The Syndicate holds investments in its balance sheet and the performance of its investment portfolio may have an effect
on the result. The income derived by the Syndicate from its investments is limited to return from short-dated US
Government bonds. Therefore, changes in interest rates, credit ratings and other economic variables is unlikely to
substantially affect the S
profitability.
The table below shows the estimated impact on the result and net assets or liabilities of a 50-basis point movement in
interest rates on the market value of the S
2024
Impact on
results
before tax
2024
Impact on
member
s
balances
2023
Impact on
results before
tax
2023
Impact on
member
s
balances
Interest rate risk
+ 50 basis points shift in yield curves
(66
)
(66
)
(76)
(76)
- 50 basis points shift in yield curves
67
67
79
79
Capital management
Further disclosures on capital management can be found
Regulatory capital requirements
The member maintains Funds at
determined in accordance with
ECA and also in accordance with the
SCR. These funds are deposited at
by the member and therefore are off balance sheet. The S
capital
requirement as at 31 December 2024 is estimated to be £6,446,000 (2023: £6,885,000).
Restrictions on available capital resource
The available resource of the S
trust funds is described in the following tables. Member
s balances are distributed
on the closure of an underwriting year subject to meeting
and other regulatory requirements. Such amounts
cannot be distributed without an up-to-date actuarial valuation.
Other UK life business
2024
2023
9,510
7,530
Total available capital resource
9,510
7,530
Long-term business provision
(5,532)
(6,080)
Other technical provisions
(14)
(17)
Gross technical provisions in the balance sheet
(5,546)
(6,097)
The general reduction in the technical provisions during 2024 is due to the run-off of the liabilities over time as the
Syndicate no longer writes new business.
Movements in capital resource
2024
2023
Balance at 1 January
7,530
6,227
Movement in member
s balances
1,980
1,303
Balance as at 31 December
9,510
7,530
Tokio Marine Kiln Life Syndicate 308
Report and accounts for the year ended 31 December 2024
41
Capital resource sensitivities
The capital position is sensitive to changes in market conditions, due to both changes in the value of the assets and the
effect that change in investment conditions may have on the value of the liabilities. It is also sensitive to assumptions
and experiences relating to mortality and morbidity and to a lesser extent, expenses and persistency. The most significant
sensitivities arise from the following risks:
market risk, which would arise if the return from the fixed interest investments which support this business
were lower than that assumed for reserving (currently the valuation interest rate is assumed to be the risk-
free discount rate), and
mortality risk, which would arise if mortality of the lives insured were heavier than that assumed, possibly
because of an epidemic or catastrophe.
The timing of any impact on capital would depend on the interaction of assumptions and past experience about future
experience. In general, if experience was worse or was expected to deteriorate, and management actions were not
expected to reduce the future impact, then assumptions relating to future experience would be changed. In this way,
liabilities would be increased to anticipate the future impact of the worse experience with immediate impact on the capital
position.
c) Fair value estimation
Financial instruments that are fair valued through profit and loss are classified using a fair value hierarchy that reflects
the significance of the inputs used in these measurements.
Level 1 financial instruments comprise government bonds and securities which have been valued at fair value
using quoted prices in an active market.
Level 2 financial instruments are less regularly traded government agency bonds, supranational bonds,
corporate bonds, money market and open-ended funds. These fair values have been derived from market
observable inputs.
The fair value for level 3 financial instruments is derived from inputs that are not observable. The Syndicate
held no level 3 securities as at 31 December 2024.
The table below analyses financial instruments held at fair
its level in the fair value hierarchy:
Level 1
Level 2
Total
2024
Shares and other variable yield securities and units in unit trusts
-
4,572
4,572
Debt securities and other fixed income securities
6,362
-
6,362
Deposits with ceding undertakings
3,906
-
3,906
Total
10,268
4,572
14,840
2023*
Shares and other variable yield securities and units in unit trusts
-
4,937
4,937
Debt securities and other fixed income securities
5,661
-
5,661
Deposits with ceding undertakings
3,482
-
3,482
Total
9,143
4,937
14,080
*Please refer to the Restatement of comparative information section in note 1.1.
23. Distribution and open years of account
2024
2023
2018
1,980
1,303
24.
Post balance sheet events
There are no post balance sheet events to report.